Management Notes

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Recent Amendment in Company Act by 2074-1-19 (May 2,2017) | Revised Company Act of 2063

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Recent Amendment in Company Act by 2074-1-19 (May 2,2017)
Revised Company Act of 2063
Business Environment In Nepal
Management Notes


A Company is a voluntary association of people united for the common objective.Company Act is an act of Parliament which regulates the workings of companies, stating the legal limits within which companies may do their business.

In order to bring about dynamism in the economic development of the country by promoting investment in the industry,trade and business sectors through economic liberalization and make the incorporation, operation and administration of companies much easier, simpler and more transparent;it is very mandatory to amend and consolidate the laws relating to Companies.


Amendment in Company Act

Basis Existing Laws Amended(2074-01-19)
Office  Existing Company act says that office is only the Company Registrar’s Office setup by the Government of Nepal for the Administration of companies. Recent amendment in Company Act says that office is the Company Registrar’s office setup by the Government of Nepal for the administration of companies  and which also includes the branch office of the Company Registrar’s Office. 
Number of shareholders Existing Company act says that the number of shareholders of a private company shall not exceed fifty(50). Recent amendment in Company Act says that  the number of shareholders of a private company  shall not exceed one Hundred one(101).
Incorporated as public company  Existing Company act says that a company carrying on the business of banking, financial transactions, insurance business related transactions, stock exchange business, pension fund or mutual fund or a company carrying on such other business or transactions as may be prescribed shall be incorporated as a public company. Recent amendment in Company Act says that a company carrying on the business of banking, financial transactions, insurance business related transactions, stock exchange business, pension fund or mutual fund or a company carrying on such other business or transactions as may be prescribed shall be incorporated as a public company. And telecommunication service provider company having paid up capital more than five cores shall be incorporated as a public company. The registered private companies till date shall be converted to public company as per the recent prescribed laws.
Power to issue share at premium

Existing Company act says that a if (i)a company which has been making profits and distributing dividends for three consecutive years (ii) having net worth more than  its total liabilities and (iii)company’s general meeting has decided to issue shares at a premium , then the company  can issue their shares at premium.

 Recent amendment in Company Act says that any public company who can do public issue of securities under prevalent securities laws can issue share at premium as per the conditions and provisions mentioned in the prevalent securities laws.

But private company or other public company for which there is no provision of public issue of securities in the prevalent securities laws can issue share at premium after getting approval from the general meeting if the company’s assets exceeds its liabilities.
Inventory of shares and debentures Existing Company act says that every company shall prepare and maintain an inventory of the existing shareholders and debenture holders. Recent amendment in Company Act says that every company shall prepare and maintain an inventory of the existing shareholders and debenture holders prior to 21 days before the holding of Annual General Meeting(AGM).
     
     
   

 

Smirti
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